Pet Insurance Marketplace Is A 'Golden Possibility'

 

 

The advent of driverless automobiles, also known as autonomous vehicles (AVs), will radically change our landscape as well as our day-to-day lives. In this series of articles, we’ll examine how these AVs will affect the auto insurance industry, and how enterprises can prepare to meet the upcoming challenges and opportunities. In this article, we’ll look at what an AV is and what its implications are for the car insurance industry.

As the driverless car market continues to develop, consumers and businesses are starting to wonder how insurance will continue to be relevant in this new world of autonomous transportation. In fact, auto insurance companies are asking themselves this very question as well; some of them even believe that drivers will no longer need insurance in the future! How will things shake out? In this article, we’ll explore how auto insurance enterprises will react as driverless technology develops and what impact it will have on the industry as a whole.

 

When cars can drive themselves, what does car insurance look like?

Self-driving cars are expected to hit the roads as early at 2020. That means driverless motors, which has implications for auto insurance. With no human drivers, the insurer will have to change dramatically. Cars that take part in accidents will need to be retested before they can be used again and payout amounts could be out of proportion with modern standards if a court deems a car's infraction as an intentional act. In these cases, someone who lives inside a city may pay less than someone who lives outside a city where there is more pedestrian traffic. We're also likely to see lower costs for premiums since self-driving cars will almost never be found at fault when it comes to collisions. It's estimated that this new innovation could save $200 billion annually by 2050. What does this mean for insurance? The day might come when people buy a car and then enter into an agreement with their own insurer to insure the vehicle.

The world might come full circle to individualized driving coverage, depending on how companies respond to new technologies. For example, there might not be a big demand for collision or comprehensive coverage anymore. If you want those types of policies, you'll need to pay more upfront or get them from your home insurance company (and hope they won't penalize you).

 

Three ways enterprises could provide car insurance for driverless cars

Until driverless motors are more common, auto insurance enterprises will likely provide traditional car insurance policies. When cars first made their way into households, people did not know how to handle or properly maintain them. There was a widespread assumption that accidents would be rampant and irresponsible driving behavior would be uncontrollable. While these predictions may have been valid for some time, humans eventually adapted to this new technology and became safer drivers as a result. The fear of getting behind the wheel of a driverless motor could very well have a similar result in mitigating reckless behavior behind the wheel. As time goes on and driverless motors become more commonplace, entrepreneurs will develop new approaches to handling coverage requirements based on how they believe people will behave when they don't need someone else to get them around town.

- One possible model is a usage-based approach where vehicle owners pay for usage based on distance driven, duration of trips and other factors. 

- A second option is offering specialized coverage plans which include supplemental insurance riders such as disability and uninsured/underinsured motorists coverage in case an accident were to occur while at the helm of a driverless motor. If there were ever any questions about whether a driver's license is necessary with the advent of driverless motors, it should be noted that basic liability insurance - property damage and bodily injury - would still apply even if one had no intention of taking control over the vehicle. 

- Thirdly, institutions could simply offer customers who own driverless motors separate policies covering all potential risks associated with ownership.

 

Consumers will lose out if enterprises don’t adapt

Some may argue that driverless motors will lead to greater safety for drivers and passengers, due to the elimination of human error. However, it is unclear whether this reasoning can justify enterprises not adapting. The truth is, companies should strive to keep up with changes in technology and consumer demands; if they do not, consumers will lose out. For example, when music streaming services shifted from downloads to streaming, some people failed to adopt this change and felt left behind by all of their friends on social media who have already converted. Companies must not underestimate customer attachment to traditional practices if they want customer satisfaction and loyalty going forward. In light of these observations, auto insurance enterprise executives should ask themselves three questions about the future of driverless cars. 

- First, what business opportunities might arise from innovations? 

- Second, how could I take advantage of them? 

- Third, how can I prepare my company for the changes that are coming? 

In order to better understand where things are headed before it’s too late to adapt. Automakers like Toyota, Volvo, Audi, Tesla and Mercedes-Benz have been investing heavily in self-driving car research. Furthermore, Uber has partnered with Carnegie Mellon University's robotics lab to develop a fleet of self-driving taxis as part of its goal to make transportation cheaper than owning a car. (There are also studies being conducted at Stanford University.) A few startups have also been working on autonomous vehicles like Zoox Inc., Google's Self-Driving Car Project, which just unveiled a prototype two weeks ago after more than six years of development - it's still unclear how quickly autonomous vehicles will be integrated into society though.

 

The transition to driverless motors will not only change the way we drive, but also how we insure our vehicles and how insurance companies operate. In this article, you’ll learn more about how the auto insurance enterprise will adapt to the driverless era.